Finance Process Optimisation will save you more than money

Over the last 5 years I have had several CFO's approach me who wanted me to 'run the rule' over their Finance Processes. By that I mean the typical end to end Processes referred to as Purchase to Pay (P2P), Order to Cash (O2C) and Record to Report (R2R). They didn't want a Transformation Program or a new Finance Shared Services Centre but they wanted to have a good look under the bonnet. After all the buck stops with the CFO and these days Risk lurks around every corner.

Invariably they were new to the Business, but seasoned CFO's in their own right and generally they had risen to the top without necessarily having managed the 2 main transactional process teams that P2P and O2C runs through. I would hazard an experienced guess, it is only a guess, that the majority of people who reach CFO level did not have much exposure to either Processing team.

Until now I don't think that has been too much of an issue for career progression or security but with the rise in methods by which Businesses are exposed to fraudulent transactions, it is the area that stands to potentially cost them far greater than before.

Poor Processes have hidden a multitude of Financial sins for many decades and nobody has been any the wiser, or fired, but in the current technological age that is no longer a given by any means. The conversation usually goes something like this:

"We definitely don't need any major Transformational work but we feel that our Processes maybe non Compliant in several ways, with weak Controls and a degree of inefficiency. However, we can't quite quantify our degree of exposure, and this makes us uneasy in advance of Year End and the ensuing Audit, can you take a look?"

"Yes, I certainly can help you with a full E2E Process Assessment and quantify your level of exposure. I typically document each Process and then stress test each one based on my experience in Transforming a multitude of Finance Processes. I then give you a Traffic Light Report into each Process which contains Red or Green and this will take me 6 to 8 weeks"

"Hold on a second says the CFO what about Amber? I cough politely and explain that Amber stands for Ambiguity, means absolutely nothing and if you want me to include Amber it will take 12 weeks."

They tend to stare at me for a minute with a wry smile forming on their face. I am offering them a 4 to 6 week saving on their investment and they are looking for the catch. John McEnroe then enters the room with a 'you can't be serious man?' To which I reply I am most definitely am.

If we allow for Amber the length of a conversation grows by 33%, inevitably the Finance interviewee will offer every mitigating circumstance under the Sun as to why they should be Amber when we all know that Process is Red, because it certainly isn't Green.

Do you need your Finance Processes reviewed for effectiveness, compliance or efficiency? Then reach out today and lets talk.

Best Regards,

Michael Ryan.